PERSONAL FINANCES: Tips for holiday spending

Saturday

Dec 7, 2013 at 5:34 AM

By John NinfoContributing Columnist

I appreciate the opportunity to do a series on personal finances for the Messenger Post Papers, and could not be more excited.After 38 years in and around the bankruptcy courts, 20 of them as a judge; over 16 years of writing and making presentations about personal finances all over this country; founding the National Credit Abuse Resistance Education (CARE) Program for high school and college students; and hearing first hand the thoughts and experiences of so many people, especially here in the Rochester area, I hope that I have a lot to share with you and your children.Yes there will be tips, but also food for thought (to be honest, I think it’s just that I am still in a food coma from Thanksgiving), to increase everyone’s Financial IQ, help you and your family make smarter financial choices, or, for some of you, affirm the choices that you have already made.We hope you will suggest topics that you would like to see addressed, and please, continue to stop me when you see me to share any tips you think would benefit other readers.Here are my favorite holiday tips. There is still some time to consider them for this year, but now is the time to be planning for next year:1. Create a realistic and affordable budget. Decide on an amount you will spend per person and per celebration, which won’t take the joy out of the season and will also serve as your shopping list. It should include everything, even things like wrapping paper. Have it with you when you shop online or in the stores, and stick to it.Like the classic "Seinfeld" episode — anyone can make a budget, the key is to stick to it.2. Shop with cash, your checkbook or a debit card that you use with a ledger. It will keep you in touch with your money, and result in better spending decisions — you could spend as much as 20 percent less. This is true even if you would otherwise use a credit card that you pay off in full each month (and, yes — for you, consider whether this would be better than rewards). I purchased all of my gifts one year with my checkbook. As I watched my balance drop, I started saying things like "I think my father could get along with that $20 tie instead of the $30 one." He doesn’t even know the difference.3. Avoid impulse buying, by following the first two tips and avoiding last-minute shopping.4. Pay off any holiday debt as soon as possible, but within a specific time — how does three months sound? If you had no prior credit card debt, it will be easy to track. If you were carrying a balance, at least pay it down to the pre-holiday balance (we will be talking a lot about carrying credit card debt in the future).5. Consider gifts that are not just more "stuff." In our "hyper consumption society," many people would prefer a personal, more thoughtful gift. Perhaps a "quality time" breakfast, lunch or day together, or even a handmade gift.6. For next year, right after the holidays, start saving the amount you spent this year in a separate account (we used to call them holiday accounts, and they still work), comparative shop and take advantage of bargains all year long, and remember a recent commercial. A women brags about how she saved hundreds by getting up early and shopping on Black Friday. Her friend says she saved thousands by sleeping in.— John Ninfo is a retired U.S. Bankruptcy Judge and the Founder of the National Credit Abuse Resistance Education Program. To suggest topics, email him at jninfo2@gmail.com.

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